Just wanted to know if anyone else has noticed or experienced the following:
When looking at device upgrades, I see that Fido is offering certain "promotions" by slashing the monthly costs of phones (while browsing the "upgrade my device" menu.)
So I selected the iPhone 11. Cost: $31.46/month after bill credit ($36.46 originally, so basically a $5 credit). Fine.
Pair that with a $50/month data plan sure enough, we arrive at $81.46/month before tax, as shown correctly at the bottom of the screen in the "Total Monthyl fees" section. Clicking the "view breakdown" button and we clearly see te 50$ + $31.46 as advertised. So far so good.
when we finally get the Review page before pulling the trigger, the math has suddenly changed. The pre-tax total is now **$86.93/month?!
Why? It seems Fido is applying the device credit of $5 on the ORIGINAL AFTER-TAX device cost. The cost breakdown confirms this: Instead of the as-advertised $31.46/month we now have $41.93/month showing as the monthly price for the phone. $41.93 is the after-tax amount on the original $36.46.
The breakdown on the summary page looks like this:
$50 for the plan
$41.93 for the phone
$86.93/month all-in before tax.
Fido is basically charging the ORIGINAL after-tax amount for the phone, then deducting the 5$ promo, and then TAXING again the final monthly amount. The $31.46 is totally misleading and actually figures nowhere in the final billing structure.
Am I missing something here?
Welcome to the community!
It's a common misconception that the monthly cost of the phone was reduced. However, that was technically not the case. The device cost shown on the website was calcuated after bill credit. The monthly cost of the phone remained the same but customers were getting a credit on their bill to offset the cost of the phone.
I haven't been able to access that particular promotion on the website, however, I'll use the values you provided. While the monthly installment for the phone would still be the $36.46 (before taxes) per month, there is the discount of $5 which would calculate to the stated $31.46 per month. As you note, the $41.93 includes taxes for the phone.
So your summary should look like:
Monthly plan $50
Monthly discount $5
Subtotal including taxes: $51.75 (assuming 15% taxes as calculated from:
@oc917 wrote:...$41.93 is the after-tax amount on the original $36.46...)
Monthly Installment (including taxes): $41.93
Total: $51.75 + $41.93 = $93.68 (including taxes)
Since the Monthly Installments already include taxes, they are not subject to taxes again. Is your final total different from that amount?
I have replied to other similar queries explaining the math, here and here.
Hope this helps 😀
$93.67 is the correct total, you're right, the taxes were only applied once. That's another problem because at the bottom the subtotal includes the $41.93 and the $45 (50$-5$), essentially adding a before-tax and after-tax amount in the subtotal.. then they calculate the taxes only on the data plan. What a mess!
But this doesn't change the fact that the advertised "$31.46" is misleading since they're not applying the credit to the before tax amount on the phone, but actually on the plan. So in fact $31.46 is a fictituous number since there's no way of justifying it the way Fido calculates the credit. Applying a 5$ credit to the original after tax amount of the phone, or the data plan (as they've done) would be equivalent to $36.93 "after bill credit" on the phone, not "$31.46."
See images attached.